Model intelligence and knowledge aren't necessarily directly related. If we can pack greater intelligence and agency at the cost of it forgetting factoids, that would actually be a good thing. We don't need LLMs to memorize facts, we need them to learn how to interact with the world such that they can find the facts that are necessary and surface them to the user.
If we could distill all of the knowledge out of an LLM and just be left with a very agentic model that only knows facts in it's context, I think some very interesting stuff would happen.